The Current Model most closely describes a pass-through entity while a variation of the Deferred Model describes a C corporation.

Question

Quizplus · Accepted Answer

The Current Model, also known as the entity-level tax, treats income at the entity level and then passes it through to the owners who pay individual taxes on their share of the income. This closely describes a pass-through entity such as a partnership or S corporation. On the other hand, the Deferred Model, which defers taxes at the entity level, is more commonly associated with C corporations. However, the question mentions a variation of the Deferred Model, which could potentially be applied to other types of entities as well.

The Current Model Most Closely Describes a Pass-Through Entity While